of the unpaid shares subscribed, or balances due thereon, as of the amount which has actually been paid in. Such unpaid shares or balances are as much a part of the capital stock as the sums which have already been realize:] thereon. Aside from the funds on hand, they often constitute the only resource of the company. They are debts due to it, the payment of which can be enforced by its officers. The delinquent subscribers are its debtors, and the directors are clothed with authority to compel them to pay. When the company is indebted, and other means of meeting its liabilities are exhausted, the exercise of this authority becomes a duty, which they are under the highest moral obligation to perform. Creditors are supposed to have trusted as well to such unpaid subscriptions, and to the fair and faithful exercise of such compulsory power for their payment, as to the sums actually paid in; and when it becomes necessary to their security or satisfaction, they have a legal right, either by the voluntary action of the proper officers, or through the aid of the courts of the country, to such exercise of it. If, therefore, by the willful or stubborn inaction of the directors or stockholders, the company fails to meet its obligations and perform its duties, a court of equity will, on a proper application, afford the requisite relief." But, "in speaking of the assets of an insolvent corporation as constituting a trust fund for the payment of creditors," says Robinson, J., in Brant v. Ehlen, 59 Md. 124, “it is necessary to understand precisely what is meant by the courts. No one will pretend for a moment that in subscribing to the stock of a company, the purpose is to create a trust fund for creditors. On the contrary, the object, primarily, is to furnish means to carry on its business, and to share the profits earned by the corporation; and so long as it is a going concern, it has the right, and indeed it is its duty, to manage and dispose of its assets, including stock subscriptions, for the promotion of its own interest. If it ceases to do business, or if it becomes insolvent, then all assets which it then has or owns, including paid and unpaid subscriptions, either in the hands of the original subscriber or in the hands of his assigneo with notice, become a trust fund for the payment of creditors, and they have the right to follow the property constituting this fund and subject it to the payment of their debts, unless it has passed into the hands of a bona fide purchaser without notice."

EQUITABLE JURISDICTION TO COMPEL PAYMENT OF UNPAID SUBSCRIPTIONS, OR TO MAKE CALLS. Since unpaid subscriptions to the capital stock are regarded in equity as a trust fund for the benefit of the creditors of a corporation, it results that courts of equity have jurisdiction and will compel the payment of the subscriptions by stockholders, as equitable assets, at the suit of creditors of the corporation, if the legal assets which can be reached by execution prove insufficient: Note to Freeland v. McCullough, 43 Am. Dec. 695; note to Germantown Passenger R'y v. Fitler, 100 Id. 553; Cook on Stock and Stockholders, sec. 204; Thompson's Liability of Stockholders, secs. 9 ct seq.; 2 Morawetz on Corporations, sec. 820; Taylor on Corporations, sec. 703; Ogilvie v. Knox Ins. Co., 22 How. 380; Holmes v. Sherwood, 3 McCrary, 405, 408; 16 Fed. Rep. 725, 727; Bissit v. Kentucky River Nav. Co., 15 Fed. Rep. 353; Wilbur v. Stockholders of Glen Iron Works, 18 Nat. Bank. Reg. 178; 13 Phila. 479 (U. S. D. C., E. D. of Pa.); Allen v. Montgomery R. R., 11 Ala. 437; Glenn v. Semple, 80 Id. 159; 60 Am. Rep. 92-94; Jones v. Jarman, 34 Ark. 323, 328; Harmon v. Page, 62 Cal. 448; Hightower v. Thornton, 8 Ga. 486; 52 Am. Dec. 412; Stinson v. Williams, 35 Ga. 170; Mann v. Pentz, 3 N. Y. 415; Gillet. Moody, 5 Barb. 179; 3 N. Y. 479; Gilmore's Ex'rs v. Bank of Cincinnati, 8 Ohio, 62, 71; Henry v. Vermillion etc. R. R., 17 Id.

187; Bank of Virginia v. Adams, 1 Pars. Sel. Cas. 534; Lane's Appeal, 105 Pa. St. 49; 51 Am. Rep. 166; Bassett v. St. Albans Hotel Co., 47 Vt. 313. And as shown above, even if creditors of the corporation can compel its officers by mandamus to make calls to meet the company's liabilities, they are not obliged to do so, but may resort to equity: Ward v. Griswoldville Mfg. Co., 16 Conn. 593, 601; Dalton etc. R. R. Co. v. McDaniel, 56 Ga. 191; and as further shown, no action at law, independent of statute, can be maintained by creditors against stockholders, but proceedings must be had in equity: Cooper v. Frederick, 9 Ala. 739, 742; Jones v. Jarman, 34 Ark. 323, 328; Spear v. Grant, 16 Mass. 9, 15; Brown v. Fisk, 23 Fed. Rep. 228. This equitable suit, furthermore, is not affected by any remedy which may be given creditors against stockholders by constitutions, charters, general acts of incorporation, or other statutes, unless of course the equitable remedy be taken away expressly or by necessary implication: See Harmon v. Page, 62 Cal. 448; Holmes v. Sherwood, 3 McCrary, 405; 16 Fed. Rep. 725; and it is held that although installments of the subscription are due, and may be reached by process of garnishment, the equitable jurisdiction nevertheless exists: Payne v. Bullard, 23 Miss. 88; 55 Am. Dec. 74; contra: Allen v. Montgomery R. R., 11 Ala. 437. So where a state constitution provides that the stockholders of corporations "shall be liable for the indebtedness of said corporation to the amount of their stock subscribed and unpaid, and no more," no new right is created, and the remedy of a creditor gainst a stockholder for unpaid subscriptions is still in equity: Patterson v. Lynde, 106 U. S. 519; 112 Ill. 196, 204, 207; Bush v. Cartwright, 7 Or. 329; Brundage v. Monumental G. & S. Min. Co., 12 Id. 322; compare Hodges v. Silver Hill Min. Co., 9 Id. 200, 204; Mills v. Stewart, 41 N. Y. 384, 389; Stephens v. Fox, 83 Id. 313.

While it is essential to the recovery by the corporation itself against the stockholders upon their contracts of subscription that the money should be due and payable, either because the contracts themselves have definitely fixed the times of payment, or because calls have been made by the governing body of the corporation, no such condition is imposed upon the creditors with regard to their right to proceed in equity against the stockholders. No previous call need be shown by the creditors, nor need they show that they have endeavored to induce the corporation to make a call as a prerequisite to a suit in equity to compel stockholders to pay their unpaid subscriptions: 2 Morawetz on Corporations, sec. 821; note to Germantown Passenger R'y v. Fitler, 100 Am. Dec. 554; Marsh v. Burroughs, 1 Woods, 463, 468; Holmes v. Sherwood, 3 McCrary, 405; 16 Fed. Rep. 725; Thompson v. Reno Sav. Bank, 19 Nev. 171; post, p. 881; Thompson v. Reno Sav. Bank, 19 Nov. 242; post, p. 883; although the subscriptions are payable "as called for by the company": Hatch v. Dana, 101 U. S. 205; see also Upton v. Hansbrough, 3 Biss. 417.

Besides the usual proceeding in equity above described, in the nature of a creditor's bill, to compel the payment of unpaid subscriptions by stockholders, it is also settled that when stock is payable upon call, and the corporation refuses or neglects to make a call, a court of equity may itself make it, if the interests of the creditors require it: Cook on Stock and Stockholders, sec. 207; Thompson's Liability of Stockholders, sec. 16; note to Germantown Passenger R'y v. Fitler, 100 Am. Dec. 553; Dr. Salmon v. The Hamborough Co., 1 Cas. Ch. 204; Scovill v. Thayer, 105 U. S. 143, 155; Glenn v. Williams, 60 Md. 93; Briggs v. Penniman, 8 Cow. 3S7, 395; 18 Am. Dec. 454, 460; and the decree determining and making such an assessment is binding and effective upon the stockholders who were not, in their individual

capacities, parties to the suit, they being represented by the corporation: Glenn v. Williams, supra. It iз obviously necessary, however, for such a purpose, that a sufficient corporate organization should continue to exist: Wilbur v. Stockholders of Glen Iron Works, 18 Nat. Bank. Reg. 178; 13 Phila. 479 (U. S. D. C., E. D. of Pa.). The "assessment," or "call," so named, is also different in its nature from the assessment or call made by a solvent corporation. The proceeding is simply in aid of the judicial recourse of the creditors. "It may promote the enforcement, but is not essential to the existence of the obligation of the stockholders": Wilbur v. Stockholders of Glen Iron Works, supra.

In the suit first above noted, to compel the payment of unpaid subscriptions, the right of creditors is as clear and strong after as before the dissolution of the corporation: Hightower v. Thornton, 8 Ga. 486; 52 Am. Dec. 412; Tarbell v. Page, 24 Ill. 46; although at common law, at least under the old theory, the debts due to and from the corporation are extinguished upon its dissolution: See Hightower v. Thornton, supra; Thornton v. Lane, 11 Ga. 459; compare Thompson's Liability of Stockholders, sec. 3. Herein this case differs from that above mentioned, where it is sought to have a call made by a court of equity, in which, it seems, the corporation must be in existence: See Wilbur v. Stockholders of Glen Iron Works, supra. And notwithstanding the common-law rule as to the extinguishment of debts upon the dissolution of a corporation, it is competent, it may be here observed, for the legislature to interpose and prevent such a result: Robinson v. Lane, 19 Ga. 337; and see Lane v. Morris, 8 Id. 468, 476; Thornton v. Lane, 11 Id. 459; Thompson's Liability of Stockholders, sec. 3. Of course the insolvency of a corporation is no ground for restraining the collection of subscriptions by itself to its stock: Note to Germantown Passenger R'y v. Fitler, 100 Am. Dec. 552; Dill v. Wabash Valley R. R., 21 Ill. 91; Protection Ins. Co. v. Ward, 28 Conn. 409. “Indeed, it shows the more urgent reason why they should be collected": Dill v. Wabash Valley R. R., 21 Ill. 91.

If it be necessary, creditors may compel discovery of the names of stockholders and the amounts unpaid on their subscriptions: Morgan v. New York etc. R. R., 10 Paige, 290; 40 Am. Dec. 244; Miers v. Zanesville etc. Turnpike Co., 11 Ohio, 273; and see President etc. of Middletown Bank v. Russ, 3 Conn. 135; Bogardus v. Rosendale Mfg. Co., 7 N. Y. 147. A creditor can compel payment of the entire stock, if required to satisfy his demands: Halderman v. Ainslee, 82 Ky. 395. So, to the extent of their own unpaid subscriptions, stockholders may be liable to make good the deficiency of assets of the corporation arising from the insolvency of other stockholders: Haslett's Ex'rs v. Wotherspoon, 1 Strob. Eq. 209. And the fact that holders of unpaid stock of a banking corporation have severally redeemed their shares of bank bills, under the charter which provided that the persons and property of the stockholders should be liable for the redemption of the bills and notes of the bank, in proportion to the number of shares of stock which they held, will not release them from liability for the amounts due on their stock subscriptions: Marsh v. Burroughs, 1 Woods, 403; and it may here be further observed that generally where statutes impose an individual liability upon stockholders for the debts of a corporation, that such liability is over and above the liability for unpaid subscription: See Patterson v. Wyomissing Mfg. Co., 40 Pa. St. 117. If the complainant is also a stockholder, he must contribute pari passu with the defendant stockholders towards the liquidation of his demand against the corporation: Bisset v. Kentucky River Nav. Co., 15 Fed. Rep. 353. It is possible that share-holders may be liable to creditors of a corporation

for unpaid subscriptions, notwithstanding a violation of the charter with respect to the subscriptions, as the following cases will illustrate. There is no liability on subscriptions to the capital stock of a corporation until the whole of the capital, as prescribed by the charter, has been subscribed; and therefore a creditor's bill will not lie to euforce payment of such subscriptions, unless for some cause the subscribers have estopped themselves from alleging that the entire capital was not subscribed: 2 Morawetz on Corporations, sec. 823; Temple v. Lemon, 112 Ill. 51; but if a corporation should, in violation of its charter, begin to carry on business, and incur debts before its entire capi. tal stock had been subscribed, undoubtedly the share-sholders would be liable to the extent of their subscriptions, if necessary to pay creditors: 2 Morawetz on Corporations, sec. 823; Morrison v. Dorsey, 48 Md. 468; Musgrave v. Morrison, 54 Id. 161; Hager v. Cleveland, 36 Id. 476; compare Boston etc. R. R. Co. v. Pearson, 128 Mass. 445. So a creditor's bill will lie against stockholders to compel the payment of unpaid subscriptions, although they failed to pay at the time of their subscriptions the per cent required by the charter: Henry v. Vermillion etc. R. R. Co., 17 Ohio, 187. And "if the charter of a bank require a certain portion of the capital stock in specie to be paid in before the directors are permitted to issue bank notes, and the stock is subscribed, but the specie is not paid, and the directors nevertheless proceed to issue and put in circulation the bank notes, if the bank fail or become insolvent, the bill-holders and creditors may proceed at once against the stockholders for the subscribed stock not paid in, and against the directors for a breach of trust for issuing and putting in circulation notes on unpaid subscribed stock, contrary to their duty under the charter ": Schley v. Dixon, 24 Ga. 273, 277.

If a state has become a stockholder in a corporation, a creditor's right to compel it to pay its unpaid subscription will depend upon the question whether or not suit can be maintained against it under its constitution and statutes; for a sovereign state cannot be sued without its consent, and then only in the particular mode and forum nominated by itself: Thompson's Liability of Stockholders, sec. 20. If, therefore, a state has subscribed to the stock of a corporation, and has not made payment, an action to compel payment will not lie against it without its consent: Miers v. Zanesville etc. Turnpike Co., 11 Ohio, 273; but if a state has rendered itself liable to a private action, and has become a stockholder in a corporation, it subjects itself to the same liabilities which attach to any private stockholders: Curran v. State of Arkansas, 15 How. 304; compare Robinson v. Bank of Darien, 18 Ga. 65, 109; Dabney v. Bank of South Carolina, 3 S. C. 124; and a city having subscribed to the stock of a railroad company, under an act authorizing cities to aid in the construction of railroads, is bound by the same statutory liability which attaches to an ordinary stockholder for labor done in the construction of the road: Shipley v. City of Terre Haute, 74 Ind. 297.

It has been held that a court of equity had no jurisdiction to compel resident stockholders to pay their unpaid subscriptions on the application of creditors of a foreign corporation: Bank of Virginia v. Adams, 1 Pars. Sel. Cas. 534, - a technical decision; and it is otherwise held that the judgment which it is necessary for the creditor to first obtain against the corporation must be a judgment of the courts of the state where the liability is sought to be enforced: Patterson v. Lynde, 112 Ill. 196, 204.

In Warner v. Callender, 20 Ohio St. 190, it was held that a judgment creditor could unite, in the same action, a claim to compel payment of unpaid

subscriptions for stock and a claim to enforce the statutory liability of the stockholders for the debts of the corporation.

CREDITOR MUST EXHAUST LEGAL REMEDIES AGAINST CORPORATION BEFORE PROCEEDING IN EQUITY AGAINST STOCKHOLDERS FOR UNPAID SUBSCRIPTIONS. As has already been intimated, before a creditor can resort to equity to compel the payment of unpaid subscriptions, it is necessary, under ordinary circumstances, that he should have exhausted his legal remedies against the corporation by judgment and execution thereon returned unsatisfied: Note to Germantown Passenger R'y Co. v. Fitler, 100 Am. Dec. 554; Cook on Stock and Stockholders, sec. 200; 2 Morawetz on Corporations, sec. 820; Taylor on Corporations, sec. 703; Terry v. Anderson, 95 U. S. 628, 636; Patterson v. Lynde, 112 Ill. 196, 204; Wetherbee v. Baker, 35 N. J. Eq. 501, 506; Blake v. Hinkle, 10 Yerg. 218; Adler v. Milwaukee Patent Brick Mfg. Co., 13 Wis. 57, 62; see also Ogilvie v. Knox Ins. Co., 22 How. 380; Holmes v. Sherwood, 3 McCrary, 405, 408; 16 Fed. Rep. 725, 727; Allen v. Montgomery R. R. Co., 11 Ala. 437; Harmon v. Page, 62 Cal. 448; Stinson v. Williams, 35 Ga. 170; Mann v. Pentz, 3 N. Y. 415; Lane's Appeal, 105 Pa. St. 49; 51 Am. Rep. 166. These are the ordinary prerequisites to the filing of a creditor's bill: See 2 Freeman on Executions, sec. 428; 3 Pomeroy's Eq. Jur., sec. 1415, and notes. But within the general principles of creditors' suits, special circumstances, as the bankruptcy of the corporation, its notorious insolvency, or its formal dissolution, may excuse creditors from first taking these steps: See Cook on Stock and Stockholders, sec. 200; Terry v. Anderson, 95 U. S. 628, 636, per Waite, C. J.; but it is not a sufficient showing that no judgment at law could be obtained to allege that the stockholders have failed and refused to elect directors and officers, an act of the legislature expressly authorizing process to be served on the late president, cashier, or any director of the corporation: Blake v. Hinkle, 10 Yerg. 218.

It has been held that the judgment must be a judgment of the state in which the creditor's bill is filed: Patterson v. Lynde, 112 Ill. 196, 204; Bank of Virginia v. Adams, 1 Pars. Sel. Cas. 534, —a ruling which might be the means of denying the creditor relief; but if a receiver of the corporation is appointed by a court of equity of one state, or if the corporation has made an assignment for the benefit of creditors, and the court has made an assessment, such receiver or assignee will be permitted to maintain an action at law in another state to recover the amounts unpaid thereunder: Glenn v. Williams, 60 Md. 93; Patterson v. Lynde, 112 Ill. 196, 206; Dayton v. Borst, 31 N. Y. 435, 438.

JUDGMENT AGAINST CORPORATION IS CONCLUSIVE IN CREDITOR'S SUIT TO REACH UNPAID SUBSCRIPTIONS. —Since a judgment conclusively establishes the plaintiff's claim against parties and privies, and cannot be collaterally attacked, except for fraud or want of jurisdiction, it follows that, as the stockholders are represented in the action by the corporation, a judgment against the corporation is conclusive as to the extent and validity of the creditor's demand in his collateral suit against the stockholders to compel the payment of their unpaid subscriptions, unless the judgment can be impeached for fraud or for the want of jurisdiction: Cook on Stock and Stockholders, sec. 209; 2 Morawetz on Corporations, sec. 865; Marsh v. Burroughs, 1 Woods, 403; Bisset v. Kentucky River Nav. Co., 15 Fed. Rep. 353; Glenn v. Springs, 26 Id. 494; Glenn v. Williams, 60 Md. 93; Bank of Wooster v. Stevens, 1 Ohio St. 233; Henry v. Vermillion etc. R. R., 17 Ohio, 187, 190; compare Hastings v. Drew, 76 N. Y. 9; Stephens v. Fox, 83 Id. 313. Of course this does not preclude a